Posted on 04/11/2023 5:32:37 PM PDT by CFW
Commercial Real Estate (CRE) includes, among others, office buildings, data centers, hotels, apartment complexes, warehouses, industrial properties, retail spaces, and malls.
The U.S. commercial real estate sector is valued at $20 trillion. The total amount of commercial real estate loans outstanding is approximately $4.5 trillion, with a loan-to-value ratio of 25%. Mortgage Bankers Association data shows that banks hold the largest share of the debt, accounting for 39%.
CRE faces a perfect storm because of a combination of factors, including the rise of work-from-home jobs, rising interest rates, and the weakness of the banking system. There is a real fear that some of the iconic buildings that have become synonymous with cities and the face of commercial hubs may face changing fortunes.
(Excerpt) Read more at tippinsights.com ...
https://www.iscaninfo.com/article/9425087/Houston-Apartment-Owner-Loses-3-200-Units-to-Foreclosure-as-Multifamily-Feels-the-Heat
in office work for a lot of white collar jobs is now as outdated as the model - t. forward thinking companies will embrace wfh as a hiring and retention strategy.
SOOOOOOO—The bank is now the landlord????
AND——all those “Offices At Home” are TAX DEDUCTIBLE——BUT such workers MUST keep very accurate records.
Another result of ChiCom flu shutdowns
The only sector that is not doing well is office buildings. There is actually a shortage of retail and warehouse space, and as for apartment buildings, good luck finding an available apartment at any price. Medical buildings are also full of paying tenants.
Offices are not as bad as advertised, and can probably be worked out with some scattered losses.
As more people work from home, far from the city and city wage taxes, cities will collapse further.
Chapter 2. Black Rock acquires 3200 units at pennies on the dollar.
I don’t know about this. My spouse has been called back in now in the DC area at least 2-3 days per week and we only see it increasing. Now that gas is astronomical, we’re all supposed to go back into full force commuting. He says traffic is back to the normal snarl as well.
So much for saving on fuel!
Wow. Big foreclosure.
Depends on the area. I sell/lease industrial space in the tri-cities area of Los Angeles and am pretty insulated due to Hollywood and the Studios. Industrial has converted to creative space as no one really wants common area hallways, bathrooms, elevators and such. Outdoor features and amenities are highly desirable and help drive the market. Retail is hurting (Amazon) and High Rise is undesirable. Add interest rates driving Cap Rates higher and you cause a decline in demand and valuation.
Decamp bus line ended service from NJ to NYC on April 7th. They had started with stagecoaches in 1870. Ridership was less than 20% of pre-pandemic levels. “We have survived two world wars, the Great Depression, fuel embargoes, 9/11, economic collapse, the bubble housing market, but I never in a million years thought I’d see a time when people aren’t going to work and going into the city, he (owner Jonathan Decamp) said.” https://www.northjersey.com/story/news/transportation/2023/03/20/decamp-bus-to-nyc-commuter-service/70028525007/
“Chapter 2. Black Rock acquires 3200 units at pennies on the dollar.”
That’s about the same thing I said to my husband. Along with the comment that I’m sure that Black Rock was whispering in the bank’s ear making sure that they didn’t cut a deal with the apartment owner to allow him a little more time to make alternate financial arrangements.
I would look for an opportunity to negotiate some kind of bonus or reimbursement from the employer to partially cover expenses like utilities, internet service, phone, etc.
My guess is industrial and warehousing real estate markets will hold up just fine. You can’t take a chemical fume hoods, screw extruders, automated palletizers and Swiss lathes home with you.
I think it is but I get reimbursed a few hundred a months for phone/internet and expense pretty much everything I need so it’s not much of a write off anymore
Company I work for actually has an office about 40 minutes (if traffic isn’t bad so never) I could go to but I don’t unless needed for a gathering spot or something
To commute in every day I’m not on the road they’d have tack at least another 120-150k on to my base or it’s not happening
I know a few huge companies who allow zero remote work and they are struggling badly to retain any quality talent
The apartments were for "low income" renters in Houston, and all that implies. Wouldn't surprise me if the company I work for, RREAF Holdings, is talking to them. We have numerous apartments in South Texas, might be a good fit, at the right price.
I have no inside info, I work in the tax department, and tax season is in high gear.
Arbor Realty stock is currently besieged by short sellers. It's down nearly 30 percent in a month, so I bought more today.
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